Osborne told to ditch 'sacred cows'

George Osborne should consider removing ringfences protecting funding for areas including the NHS and overseas aid and scrap universal pensioner benefits, Tory MPs have said.

Ahead of the Budget on March 19, MPs from the backbench Tory Free Enterprise Group called for the Chancellor to take a radical approach to cutting public spending.

The group's convenor Kwasi Kwarteng said there should be no "sacred cows" and warned that the UK could face a future burdened by national debt like Italy unless action was taken to reduce expenditure over the coming years.

David Cameron has committed to protect universal pensioner benefits such as the winter fuel allowance over the course of the Parliament and the coalition Government has put protective ringfences around the budgets for aid, NHS, schools and defence equipment.

But at a briefing in Westminster Mr Kwarteng said: " We are going to have to look at focusing welfare spending on those who need it most. I think that issues regarding the winter fuel allowance will have to be looked at, I suppose in the next Parliament, whichever party gets in.

"We are going to have to be quite courageous on that because otherwise the future awaiting for us is essentially that of Italy or a Mediterranean country where they have huge debts and they live with this burden of debt seemingly in perpetuity and that's not something that we want to happen to Britain."

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He added: "T he idea of ringfencing departments needs to be looked at. If you look at fiscal consolidation anywhere in the world, even in people's own budgets - household budgets - if you are trying to reduce expenditure you will try to reduce expenditure, find savings, across the piece."

Mr Kwarteng added that after a discussion "you might decide actually you don't want to reduce expenditure on the NHS" but " what I'm saying is that we shouldn't prejudge a deficit reduction policy by saying actually we are going to have deficit reduction but we are going to ringfence these departments before we have even started discussing how we are going to have the deficit reduction".

He said he had heard of people using their winter fuel allowance to heat an indoor swimming pool.

The MP for Spelthorne added: "Right across the county I represent and the constituency I represent people are getting winter fuel allowance and I don't think they need it and, in more candid moments, they themselves say 'we don't need this'."

Fellow Free Enterprise Group MP Phillip Lee said the ageing "baby boomers" and the "less stoic" younger generation meant there was an "insatiable" demand for health spending.

Dr Lee also criticised the protection offered to the state pension and said he was sure that universal benefits would end during his political career, claiming that the younger generation was being "shafted".

He said: " I think this Budget should be about young people not old people. I'm not overly enthusiastic about triple-locking pensions, for example.

"I think younger people ... we need to feel like we are getting something out of this deal, this unwritten social contract between British society and I think increasingly people under 45 are getting shafted."

He added: "I really do think that we should start doing what's right and appeal to those older voters, who tend to vote more, by asking them the question what about your children's future and what about your grandchildren's future?"

Former hospital medic and GP Dr Lee said: " You throw another £10 billion at the Health Service, it will spend it. The public have an insatiable appetite for healthcare and I would suggest that the less stoic generations that are coming through after the wartime generations are going to have an even greater appetite for healthcare and the avoidance of pain and everything else.

"We need to be realistic about this in the longer term. We need to re-task what the state is for, need to decide what it is for and nothing is off the table."

But he acknowledged that there was little scope for cutting spending on healthcare and there may have to be a debate about rationing services - although he said he was not convinced about the benefits of that approach.

"I think if we hold the budget as a proportion of GDP at this we are doing extremely well," he said.

"We know that we have got this bubble of baby boomers coming through in the next 10 years or so and to manage that and the demands that is going to place on the Health Service I think we are going to have to start having a debate about funding.

"I'm not advocating any one policy or another but I don't think we can avoid having to either go down the rationing approach - which I'm not particularly persuaded (by), they tried it in Oregon it didn't work because you end up having a debate about what should we have and what we shouldn't; but I think we are going to have to at some point discuss that.

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"But I don't see cutting the budget as being realistic because of the fact that we have got this demand coming down the pipeline."

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